The collection and filing of transaction (and/or use) tax for the sale of goods and/or services is an increasingly difficult task for many businesses, particularly with the sale of goods/services to customers across many different tax jurisdictions.
Generally, a business will have nexus (i.e. a connection or presence) with, and therefore be required to file and submit payment of tax to, a state or other jurisdiction if it has any two of the following: sales within the jurisdiction; physical property in the jurisdiction; or employee/affiliation in the jurisdiction. Within a single jurisdiction, sales taxes may be required from multiple levels of government within the jurisdiction; for example, taxes may be required at the local, special, city, county and state levels, all in differing amounts and varying in amounts charged by different jurisdictions at a single level (i.e. each state has its own tax structure, or home rule states that release the taxing authority down to each county within a state and sets its own tax rate, and each city sets and its own rate, etc.).
A number of rules-based tax calculation engines currently exist that help businesses calculate the appropriate taxes at the transaction level for sales of goods/services within a particular jurisdiction. Nevertheless, such systems often lack the ability for users to verify tax data, check for errors and reconcile errors with the filing workflow. Moreover, many tax filing systems do not provide for data generated (EDI, XML, CSV) through a single sourced application owed in appropriate jurisdictions. Those systems that do provide for electronic filing of tax statements typically generate forms with tax data that require data from the forms to be separately keyed in by a system user or uploaded using a rigid data layout for a particular jurisdiction in which electronic filing is being made. Furthermore, to the extent current tax engine filing systems do generate sales tax data in a format that can be electronically filed, such systems which are designed specifically as not customer driven, are a considerable investment for businesses and usually require complete replacement of existing systems for which the businesses have already obtained at a considerable expense.
Therefore, it would be beneficial to provide a system that allows tax data to be generated by an existing tax filing system and processed/prepared, verified and/or reconciled by the inventive system, reviewed by a user, and/or formatted for and/or filed electronically with the appropriate jurisdiction.